RELEVANCE OF STRATEGIC MANAGEMENT IN A COMPETITIVE BANKING ENVIRONMENT

​​​​​​Background of the study: Firms are facing turbulent operating environments characterized by changing technologies and markets that represent both problems and opportunities. Technology has catalyzed this change and innovation is increasingly becoming the norm to keep pace with the ever changing needs of the customers. This has led to cut throat competition amongst business players; small, medium sized or large, each is striving to gain and maintain market leadership. With it has come great competition. Cut throat competition is virtually present in all markets and industries and is a major threat to the long term survival and prosperity of any organization (Dulo, 2006). In order to keep up with competition, firms must constantly search for a competitive strategy and practices that will ensure competitive advantage in the long term and yield market leadership. To successfully implement the intended strategies firms must deploy good strategic management practices which shall then be used to vehicle the adopted strategy in a competitive environment. What importance, value and energy a firm’s management has put to implement these practices demonstrates the intensity of their strategic management implementation. Developing a competitive strategy is thus basically developing a broad formula for how a business is going to compete, what its goals should be and what policies will be needed to carry out those goals. It is therefore a combination of the ends (goals) for which the firm is striving and means (policies) by which it is seeking to get there.  In order for a business to achieve competitive advantage its competitive strategy should involve positioning a business to maximize the value of the capabilities that distinguish it from its competitors. Therefore the successful achievement of competitive advantage would result if a company is clear about its competitive strategy which may be cost leadership, differentiation or focus or a combination of competitive strategies. During the last few years, the banking industry has undergone a series of changes through financial reforms, advancement of communication and information technologies globalization of financial services and economic development. Those changes have had a considerable effect on efficiency, productivity change, market structure and performance in the banking industry. The increasingly competitive environment in the financial services market has resulted in pressure to develop and utilize alternative delivery channels. According to Koivu (2002), the rising need for convenient ways of accessing financial resources beyond the conventional norms has thus seen the recurrent expansion and modernization of banking patterns which has led to use of alternative channels gaining popularity as a competitive tool in the banking industry. The threat of none banking institutions and the dynamism that has become of the business environment, has left banks with no other choice other than to integrate the application of alternative channels in their strategies as a competitive tool. This provides the motivation for this study which intends to provide commercial banks in Nigeria with the necessary answers they may require to successfully apply strategic management intensity for the achievement of competitive advantage.